GUEST COLUMN: New tax on health insurance to damage economy

Most Tennessee residents know Tax Day is April 15, but we also need to know about a second tax day that has just occurred. And this one is going to cost workers, families, seniors, states and taxpayers billions of dollars and kill hundreds of thousands of jobs.

Call it the Obamacare tax bill. On June 15 the Internal Revenue Service sent out the initial bills for Obamacare’s Health Insurance Tax. This year’s tax bills are expected to total $8 billion, rising to more than $100 billion over the next decade. Though the IRS sends the bills to insurance companies, the tax is a sales tax on policies that insurance companies, like any business, pass along to consumers and employers.

At over $100 billion, the Health Insurance Tax is the largest tax in the Affordable Care Act. Its reach spans the entire health care system. It touches practically every health-care consumer, increasing the financial burden and limiting choice for employees with company-sponsored health coverage, low-income families on Medicaid and seniors on fixed incomes alike.

Study after study reveals the damaging impact of this new tax. First, the Health Insurance Tax will increase both employer and employee health-care costs. A study by a former head of the Congressional Budget Office found that the tax will increase premiums of employer-sponsored insurance by as much as 3 percent or about $5,000 per family over the next 10 years. Individuals who purchase coverage on the public exchanges, but who do not receive government subsidies to help lower the cost of premiums, will pay a higher share of the Health Insurance Tax than subsidy-eligible consumers.

When employers’ costs go up, jobs are lost. According to the National Federation of Independent Business (NFIB), the Health Insurance Tax will cost our economy up to 286,000 jobs over the next nine years, with 59 percent of job losses coming from small- and medium-sized businesses, America’s largest center of job growth. NFIB expects the tax to reduce America’s total gross domestic product by up to $35 billion by 2022.

Seniors will face higher premiums and fewer benefits. The Health Insurance Tax on certain Medicare Advantage plans and Medicare Part D prescription drug coverage, both popular and affordable choices among seniors, reaches a combined $34 billion. According to a study by the consulting firm Oliver Wyman, America’s seniors should expect to pay up to $20 per month in increased premiums this year alone, with rates doubling over the next decade.

It’s not too late to stop this economic train wreck. Legislation to repeal or delay the Health Insurance Tax enjoys Republican and Democratic support in Congress. Bipartisan legislation in the U.S. House of Representatives has 222 co-sponsors — enough to pass. Now we need the Senate to act.

Higher health care costs, fewer jobs, more pressure on state budgets and reduced benefits, Obamacare’s Health Insurance Tax is the wrong tax at the wrong time and Congress must stop it. Tennesseans need affordable health care and good jobs. What they don’t need is another tax day.

Bill Ketron, a Murfreesboro Republican, represents the 13th District in the state Senate and is the majority caucus chairman.